The laws that generally provided for mandatory retirement in Canada have been eliminated. Across Canada, with very few exceptions, employees generally cannot be forced to retire at age 65. But can their benefits be cut off at age 65?

Even if employers are permitted to cut off benefits to workers 65 and older under human rights antidiscrimination laws, are they contractually entitled to do so? Recent labor arbitration decisions indicate that if employers don’t properly contract to cut off benefits, they may not be entitled to cut off benefits at all.

As we reported previously, the Canadian federal government is about to join most of the provinces in making mandatory retirement, for the most part, unlawful. That deadline is fast approaching – December 15, 2012. What can employers do until then? According to the Canadian Human Rights Commission, very little.

Human Rights Commission news release

Earlier this year, the Canadian Human Rights Commission issued a news release cautioning employers against using the time leading up to December 15 to force employees to retire before they are ready to. In the release, Acting Chief Commissioner David Langtry said that “[t]he transition period should not be viewed as a license to force aging workers out the door. Forcing someone to retire because of their age clearly contradicts Parliament’s intent, even if a defence in the law still appears to be available.” read more…

Mandatory retirement has a long and storied history as part of the Canadian labor system. As we enter 2010, it appears that a new chapter is being written, one in which mandatory retirement is the exception rather than the norm.

In Canada, mandatory retirement developed along with the introduction of private and public pension plans. Public programs, such as the Old Age Security, Guaranteed Income Supplement, and the Canada and Quebec Pension Plans, provided that retirement benefits were to be paid beginning at age 65. Private businesses developed or adapted their plans to complement and integrate with government pensions. By the 1970s age 65 had become generally accepted as the “normal” age of retirement by employers and workers alike.